Alan Wardyga, a certified financial planner at Wealth Management Resources in Lincoln, R.I., analyzed the Powell family's spending pro bono.
"People don't think about financial planning every day because they are fighting traffic jams and getting back and forth from work," he says.
Mr. Wardyga called the Powell's habits "typical" of families he's counseled in his 11 years in the business. And he pronounced their approach basically sound. Some of the guidance he offered the Powells is:
Planner's tip #1
"Sit down and map out what you're going to spend for the following week. Then use discipline. Keep a pad and pencil next to your bed and write down what you spent that day. After two months, you are going to know exactly where your money is going - and what can be cut out."
Planner's tip #2
"Talk to your tax preparer to make sure you're getting the proper tax benefits for child care, which help improve that ratio between what the spouse is bringing in and what child-care costs are. You should not go to work and get a second job unless you can produce twice the cost of the child care."
Planner's tip #3
"Try to shop where you work. With employee discounts, you avoid taxation. There are no income taxes for either party in that situation."
Planner's tip #4
"One person shouldn't have an exclusive on family finances. Optimally, a monthly family business meeting is appropriate. At a minimum, couples should sit down quarterly. Look at the credit-card debt. Look at the budget. It sounds a little bit formal, but it does work."
Planner's tip #5
"On services of all kinds - phone plans, for example - you've got to shop around. There are lots of different deals out there. My cellphone costs me $30 a month, and I have 300 unlimited minutes all over the country. That works for me. You look at what's the best value for you. Use the Web!"
Planner's tip #6
"There are some things that make sense to buy in bulk. I believe in having fresh fruits and vegetables and fresh meats, so I don't want to buy a lot of frozen food. But as for paper goods and disposable items, buying in bulk is the only way to go."
Planner's tip #7
"Use a credit card for convenience and pay your bills off every month. When I'm going to use a credit card to buy a big item that I think I can't pay off, I'm consciously aware of that. If you're going to spend more than $100, talk to your spouse first. You both make that decision."
Planner's tip #8
"A child under 10 isn't really capable of understanding financial concepts. Think twice about either an allowance or payment for chores. After age 10, it may be OK for kids to learn about payment for services rendered. And in the teen years, they may be ready for an allowance - and to attend family financial meetings."
Planner's tip #9
"Competitive spending on children is a bad philosophy. Older children may have more needs. Don't keep trying to keep 'the score' even. The younger child will catch up, don't worry."
Planner's tip #10
"The only way you can purchase big-ticket items is to put money aside. Build it into the budget. Most people have to get a loan when buying a car. Start saving for that loan payment on a monthly basis long before you buy. Always pay deeper into principal than the loan terms require."
(c) Copyright 2000. The Christian Science Publishing Society